I would like to discuss the World Economy, highlighting some of the current strengths and developments on the examples of the U.S., Europe, China and India. We live in a very exciting time, in a truly global world which will be even further globalized in the near future. It is on us to build a strong global network that allows all of our countries and citizens around the world to have access to knowledge and enable them to trade with their foreign counterparts.
The current healthier U.S. dollar is showing mixed results for US businesses, with some benefiting from working with manufacturers and suppliers with lower currency rates and others facing the disadvantage of receiving revenue in weaker currencies. European and Japanese companies like Canon, L’Oreal and Siemens are among the manufacturers and retailers who stand to benefit from a stronger US currency. On the other hand, exporters and many large U.S. multinational companies are preparing for a decrease in their earnings.
While the U.S. dollar will continue to rise in comparison to other currencies, reports show improvement for the Eurozone economy and growth in India and China.
Factors contributing to the recent economic pickup for the Eurozone economy, where a rise in stability was and is still somewhat of a concern, include cheaper oil, looser credit and a weakening euro. The Eurozone is expected to grow by 1.2% in 2015, an increase from the 0.9% growth seen in 2014. As the second-largest economy in the world, the Eurozone’s expected growth should, also in turn, increase the global growth rate. Germany reported GDP growth as well as other smaller countries, while France and Italy remained stagnant.
While on the opposite end of the spectrum, everyone is keeping a close eye on the rapid growth rates of both India and China. The race between India and China became closer during the past fourth quarter with their GDP growth. Recent reports have shown that India is growing faster than China; however, India has also changed how it calculates GDP which figured India’s fourth quarter growth at 7.5% which was faster than China’s at 7.3%. Falling oil prices and other commodities have helped India’s economic growth, but in reality, China’s economy is still much larger than that of India.
In addition to the close race in growth rate between India and China, there are also new developments in business relations between the U.S. and India. Despite concerns arising from the recent nuclear pact between the U.S. and India, the Indian market still remains to be a huge gain for the industry. Companies, such as General Electric and Westinghouse, could be poised to win billions of dollars in maintenance and fuel contracts in nuclear energy.
These changes are very promising, and as these developments occur, the U.S. continues to be a powerful and influential international leader. These economic changes pose new opportunities for Louisiana companies doing business internationally. We at the World Trade Center of New Orleans look forward to working with you in these exciting times to create wealth across the State of Louisiana and the Gulf Coast.
Thank you for your involvement and look forward to seeing you at some of our upcoming events listed below.